Moving with the trend of manufacturing in India and Atmanirbhar Bharat, Apollo Tyres has successfully managed to inaugurate new facilities, establish new trade partners, and explore a new range of products even during the lockdown phase. The company aims to be the leader in the premium two-wheeler segment. In an exclusive video interview with CW, Satish Sharma, President & Director, APMEA, Apollo Tyres, discusses new segments in the Indian tyre industry, manufacturing and exports, moving out of the lockdown blues and much more.
Excerpts:
Our priority is to finish work-in-progress (WIP) plants. Being in the continuous process industry, wehad many WIPs stalled. Closing these plants was not a viable option. We sought permissions from the Government to get facilities started. Though we qualified for essential services, there was a two-way dialogue to understand the definitions and processes at the collectorlevel. It was followed by establishing handholding support for customersand other stakeholders, business partners, traders and our own team, and setting up the whole infrastructure.
Our quarterly results of Q1 were down by 40 per cent in revenue terms.However, June was a surprise. We were able to post a turnover in the replacement market higher than the last year; this continued in the month of July as well. The aftermarket is doing reasonably well and the response from OEMs in different shapes and colours is motivating. The agriculture segment is doing well too, specifically tractors. A better monsoon and the government package aimed at MSMEs and the rural sector have resulted in improved business activity in this segment. Apart from agriculture, the passenger vehicle (PV) segment haspicked up in July and should improve subsequently till the festival season. The commercial vehicle (CV) segment is still down.
Three years ago, Apollo Tyres doubledits truck tyre capacity in Chennai, which was soon followed by Andhra Pradesh Phase 1, which aims at achieving 7,500 car tyres a day and some 1,100 truck tyres a day. The truck tyre capacity will be further extended to 3,000 tyres a day followed by15,000 car tyres a day.We were to inaugurate it when COVID-19 struck at the very last phase of our commitment. So, we delayed our plans for three months and have inaugurated it this month.
Meanwhile, we inaugurated a steel radial motorcycle facility in Gujarat. We aim to achieve leadership in the premium two-wheeler segment in India. There is a shift towards performance motorcycles, away from the 100cc and 125cc categories, which are still going to be popular. We have the highest range of technology for this end of the market.
We also have a base in Thailand, Malaysia, Dubai and South Africa. Recently, we have opened offices in Nepal and Bangladesh. Saudi Arabia is another additionthrough an exclusive distributor model. We have openedup retail in Nepal and it is exactly like India. Before that it was through distributors.
Apollo Tyres has fared well with its presence in markets outsideIndia. We have a market share of 3-4 per cent in Europe. The APMEA region has been more responsive to varied portfolios in the past four to five years. So, we are looking for good growth in coming years.
As far asinfrastructure and mining are concerned, we have been building this business for the past five years. Today, Apollo has achieved a good thing as far as giant tyres are concerned—we first put up capacity for offtheroad (OTR) at about 13-14 tonne a day in Gujarat. We have recentlycommissioned another project for manufacturing underground mining tyres. In this segment, India has not reached the stage where mining has gone underground. We are catering to South Africa in a big way and one or two mines in India where underground mining is required. We have developed specialist tyres in the entire industrial range: for ports, graders and entire equipment and machines.
Today, our distribution network in India is fairly robust and we are growing in excess of 50-60 per cent in this businesseach year. Today, we are a confident organisation as far as the off-highway tyre business is concerned. Our range is growing; our products are getting better.